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Revenue Recognition
 9 Months Ended
Sep. 30, 2023
Revenue Recognition [Abstract]  
Revenue Recognition Revenue Recognition
Passenger Revenue

Passenger revenue is the most significant category in the Company's reported operating revenues, as outlined below:
Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2023202220232022
Scheduled service$231,757 $254,545 $862,823 $775,740 
Ancillary air-related charges273,091 252,080 866,728 765,096 
Loyalty redemptions11,403 9,851 38,723 32,205 
Total passenger revenue$516,251 $516,476 $1,768,274 $1,573,041 

Sales of passenger tickets not yet flown are recorded in air traffic liability. Passenger revenue is recognized when the underlying service is provided. As of September 30, 2023, the air traffic liability balance was $395.8 million, of which approximately $347.1 million was related to forward bookings, with the remaining $48.7 million related to credit vouchers for future travel.

The normal contract term of passenger tickets is 12 months and passenger revenue associated with future travel will principally be recognized within this time frame. Of the $379.5 million that was recorded in the air traffic liability balance as of December 31, 2022, approximately 87.2 percent was recognized into passenger revenue during the nine months ended September 30, 2023.

The Company periodically evaluates the estimated amount of credit vouchers expected to expire unused and any adjustment is removed from air traffic liability and included in passenger revenue in the period in which the evaluation is complete. Estimates of passenger revenue to be recognized from air traffic liability for credit voucher breakage may be subject to variability and differ from historical experience due to the change in contract duration (for vouchers issued in 2020 and in the first half of 2021) and uncertainty regarding demand for future air travel.

Loyalty redemptions

In relation to the travel component of the Allways® Allegiant co-branded credit card contract with Bank of America, the Company has a performance obligation to provide cardholders with points to be used for future travel award redemptions. Therefore, consideration received from Bank of America related to the travel component is deferred based on its relative selling price and is recognized into passenger revenue when the points are redeemed and the underlying service is provided. Similarly, in relation to the Allways Rewards program, points earned through the program are deferred based on the stand-alone selling price and recognized into passenger revenue when the points are redeemed and the underlying service is provided.

The following table presents the activity of the point liability for the periods indicated:
Nine Months Ended September 30,
(in thousands)20232022
Points balance at January 1$56,500 $40,490 
Points awarded (deferral of revenue)54,031 54,678 
Points redeemed (recognition of revenue)(38,723)(32,205)
Points balance at September 30$71,808 $62,963 
The current portion of the loyalty program liability represents the estimate of revenue to be recognized in the next 12 months based on historical trends, with the remaining balance reflected in noncurrent liabilities expected to be recognized into revenue in periods thereafter.